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Crossing the Chasm by Geoffery A. Moore – Book Review

On June 21, 2010

I have just finished reading Crossing the Chasm (Revised Edition) by Geoffery A. Moore. I purchased this book on Amazon after seeing it on a number of Googler’s Amazon wish-lists on LinkedIn, which is a good way to prepare for an interview with a new company! Truthfully however I decided to read the book because I have a deep appreciation of marketing and a strong desire to be an entrepreneur.

The Whole Product concept instantly resonated with me. The only thing worse than an engineer that thinks “I built it, now I just have to wait for them to come” is a sales person who thinks “we need a custom version for every customer who promises millions”. The central theme to the book is that getting a product to be successful is like organising a battle; from amassing a strong force to landing on the beach and finally taking the flag. At each stage there is a huge pit of despair that you can easily fall into. The key to it is where you spend your effort. Don’t focus too much on satisfying every product need, but just enough to appeal to a mass market. Don’t focus too much on a sophisticated marketing message, customers will get confused by and forget anything that is longer than two sentences.

One of the key learnings for me was that you shouldn’t pitch your product as a one of a kind, because nothing freaks a pragmatic buyer out more than having nothing to compare you with. How can you make a decision without a reasonable comparison? First you need to establish a market alternative (a familiar problem you are solving in an innovative new way) and secondly you establish a product alternative (a familiar solution that you have uniquely tailored to this application). By drawing a line between these two points of reference, you have created a new niche that customers will understand and appreciate.

The only aspects of this book I didn’t like were some technology references were a little outdated (even the revised edition is now 11 years old). I understand the historical examples where there was a conclusion, but some predictions are a little off (although probably good “what went wrong?” case studies). I also felt the book was a little repetitive in places, with the author jumping ahead and back again.

Overall however it was a great book and really thought provoking. It is a hard topic from my perspective because how do you teach minimalism, balance and keeping things simple? It is easy to go off on a tangent and over-invest in the area that has your short attention span as an entrepreneur. I guess not seeing the forest for the trees is a simple analogy? Anyway, I will no doubt use this book as a source of re-focusing when I do eventually realise my entrepreneurial dreams.

Inspiration for a New Year

By Scott Savage

On January 18, 2010

In Personal

CNBC recently ran a rather patriotic “Keeping America Great” interview with Warren Buffett and Bill Gates. I don’t normally read much from these guys, but there was one comment from Buffett that really struck a chord for me.

BUFFETT: First of all, I’d say marry the right person. [LAUGHTER] And I’m serious about that. [APPLAUSE] It will make more difference in your life. It will change your aspiration, all kind of things. It’s enormously important who you marry. Beyond that, I would say that do what you would do if you were in my position, where the money means nothing to you. At 79, … I work every day. And it’s what I want to do more than anything else in the world. The closer you can come to that early on in your life, you know the more fun you’re going to have in life and really the better you’re going to do. So don’t be driven where you think the last dollar is presently or anything of that sort. And then also go to work, if possible, for an organization or an individual that you admire. I mean I offered to go to work for Ben Graham because there was nobody I admired more in the business than him. I didn’t care what he paid me. When he finally did hire me in 1954, I moved from Omaha to New York and I didn’t know what I was getting paid until I got my first paycheck. But I knew I wanted to work for Ben Graham. And I knew I would jump out of bed every morning and be excited about what I would do and I would go home at night smarter than I was in the morning. Go to work at a job that turns you on and a person that turns you on and institution. [APPLAUSE]

I am determined to base the decisions I make this year on this quote.

Is there money in producing content?

By Scott Savage

On November 14, 2009

In Business, Internet, marketing

yankee-group-online-ad-market-and-internet-access-growth-2006-2011

From MarketingCharts.com

Online media is growing up. All the big media players (News, Fairfax etc.) are currently fighting it out with the new kids on the block, online pure plays (Google, Microsoft, Realestate.com.au etc.). The prize is the rapidly growing pool of online advertising revenue, predicted to pass the US$50 billion mark next year. Historically the provider with the most content has attracted the most consumers, in turn attracting the most customers. Eventually this network effect lead to breakaway market leaders establishing dominance and gradually raising the market barriers of entry. Holding all the content was a licence to print money.

Slowly general search tools like Google and Bing, as well as vertical specific search sites like Zillow, started gaining momentum. They established themselves as “middle men”, generating advertising while helping people more efficiently find the content they were looking for. They were not interested in hosting or contributing content, but rather focused on the delivery of that content. They realised that the front-end distribution is where the money is at, not at the back-end creating content. Google in particular understands this, and the publishers do not. The publishers hate that Google News provides a beautiful user interface to access their content easily and for free, yet despite their threats they do not block Google’s bots because they need a strong online delivery channel and half their traffic comes from search engines.

This style of reluctant symbiotic relationship also appears outside news content, it is extending further into real estate and videos to name just a few. Microsoft are attempting to flip the relationship by making Bing Video index Google’s YouTube content and Google Maps is indexing real estate content.

The big media content creators have recognised one thing at least, for the partnership to work each participant has to have a stake in it’s success (or failure). Licencing deals, share stakes and other structures are occurring left, right and centre as the various players align themselves. This “sorting out” period has amusing side effects, like media companies being on both sides of the legal fence. Eventually the flurry of deals will subside and the media companies will realise that YouTube is no different to their old printing press and delivery operation, it is a necessary distribution channel that takes a commission. If your printing press operator decided to make your boring black and white rag and turn it into a glossy high end publication that successfully retailed at twice the price (despite having the same content) then good luck to them, in the end you benefit from a more valuable distribution channel.

For now we are faced with more sabre rattling by the media companies, constant partnership renegotiation’s and declining print revenues. As with any market forces, the digital media market will eventually reach an unsteady equilibrium. Some sort of duopoly with Google/Microsoft as the distribution channels, and the old media companies aligned behind them as the content creators. It is unlikely that the print rivers of gold will be seen in one place again, but sharing these rivers over a wider and more competitive landscape will benefit consumers. Sooner or later content producers will realise that revenue is a balance between consumption price and volume, withholding content only encourages piracy and other forces that undermine their progress to a fair and efficient new distribution channel.